How International Integration Affects the Exports of Brazilian States

Paulo C.de Sá Porto and Carlos Azzoni

No 1-2006, TD NEREUS from Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS)

Abstract: This paper aims at assessing the impacts of international integration on the export flows of Brazilian states. We use a gravity model with dummy variables for the main partner blocs and for each pair Brazilian region - partner country, to account for the specificities of particular trade relations. Variables capturing regional openness and competitiveness are also included. We estimate a pooled cross-section model, with data for 24 countries, 27 states, and 4 years. After controlling for size and distance, trade with Mercosur and the EU is more intense than with the rest of the world. Brazilian states that account for larger shares of total interregional trade tend to trade less internationally, while the opposite holds for those that are more competitive. There are important specific factors between Brazilian regions and partner countries, as in the case of Mercosur. The results also indicate that sectoral specificities play a role in explaining state’s exports, as in the case of agriculture.

Keywords: Regional economics; international trade; gravity model; Mercosur and economic integration. (search for similar items in EconPapers)
JEL-codes: F15 R15 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2006
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